OHL Plans to Raise Up To $1.4 Billion In Largest IPO in Mexico

OHL Plans to Raise Up to $1.4 Billion in Largest IPO in Mexico Since 1994
Escrito por Real Estrategy 2 Internacional, Mercado Turístico Oct 22, 2010 OHL Concesiones Mexico SA, the unit of Spanish construction company Obrascon Huarte Lain SA, plans to raise up to 16.6 billion pesos ($1.4 billion) in the largest initial public offering in Mexico in at least 16 years.

The shares may be priced at 24 pesos to 30 pesos each, Mexico City-based OHL said in a filing. The company may offer as many as 552 million shares, making it the biggest IPO in value since at least 1994, according to data compiled by Bloomberg.

Grupo Comercial Chedraui SAB broke a 22-month drought of IPOs in Mexico in April. At least two more companies may sell stock in the nation before the end of the year, Bolsa Mexicana de Valores SAB Chief Executive Officer Luis Tellez said on Aug. 3. OHL plans to use the money to finance investment projects and expand, according to the prospectus.

The sale “would unseal the value of the Mexican concessions,” said Pablo Ortiz, an analyst with Interdin Bolsa SVB SA in Madrid. “I think those concessions are high quality and are very undervalued.”

OHL hired the local units of Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA to handle the offering, which may occur between Nov. 4 and Nov. 11, according to the filing. Shares will be offered to Mexican and international investors, the company said.

More Contracts

OHL won its sixth contract to build and manage a highway in Mexico in June. The company has a 49 percent stake in the operator of the Toluca airport outside Mexico City, according to its website.

The Mexican company wants to repeat the success of an IPO by the Brazilian unit of Obrascon, Ortiz said. The Brazilian shares have more than tripled to 56.70 reais since trading began in 2005. Obrascon rose 3.9 percent to 24.6 euros in Madrid trading and is up 29 this year.

OHL reported revenue of 11.3 billion pesos in 2009, an increase of 60 percent from a year earlier, according to the prospectus. Traffic on the toll roads OHL operates in Mexico rose 18 percent in 2008 from 2007 and revenue gained 23 percent, according to an annual report.

Bloomberg